Lidl of the Future

It seems unbelievable, but 15 years ago there was little talk in the mainstream grocery industry about Aldi, Lidl and the high street discounters. It just wasn’t a big thing.

It’s not that we were stupid. It’s more that we were (and are) an industry most comfortable dealing with what is in front of us today, this week and this year, and less at home future-scanning. Perhaps it’s the fierceness of the competition week to week that distracts us from longer-term, even bigger threats.

But we operate in a world and an industry where change is accelerating. So what can we do to make sure we don’t miss the next big thing?

First, value – but question – your data. Whatever measurement you’re using, it will have limitations. As discounters grew in the early 2000s, many companies continued to put a lot of focus on the market reads from IGD or scanning. These did not include Aldi or Lidl. But everyone was so used to using them, they just carried on. At worst, this meant the biggest dynamic in the market was ignored, or at least underestimated.

Market research too has weaknesses – many consumers do not want to take part. Research and data is critical, but don’t get too stuck on any single measure. Scorecards that purport to encapsulate the whole story are a fiction.

Second, celebrate and understand the emerging players in food and grocery. Gousto and HelloFresh have a significant beachhead in the UK. What is it about their offer that is appealing to so many consumers? Hot food delivery is on the march worldwide, an everyday option for young people in cities. Again, why is it working and what does it mean for grocery?

Amazon is powerful. It is learning in grocery and unlikely to turn its back on such a huge market. Why and when do consumers use it? These are questions you must be asking. And you need to understand these companies as employers, competing for the best people in our fields.

Third, for suppliers, make sure you are working with the emerging players – including leading-edge ones. Often volumes will be small and the cost to serve high. But it is only by working with these companies that you can fully understand what they’re doing and where they’re coming from. And it will help with your traditional grocery customers, who will value the understanding you can bring about the new entrants. By keeping abreast of all the players, old and new, you can offer the full market understanding of a “category captain”.

So: value but question your measures. Properly understand the emerging players. Do business with them. That way, you won’t miss the next big thing. What are you not talking about now that you won’t want to admit to in 15 years’ time?